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The industry newcomer is pushing the idea of an ‘instant’ home loan approval process without the need for a mortgage broker

New housing investments may be called upon to fill the gap left in the economy as the mining industry slows, according to the Australian Chamber of Commerce and Industry (ACCI) and financial comparison site Mozo.

ACCI chief economist, Greg Evans, told the site yesterday that he feels the economy has been too heavily reliant on the mining boom and the investment that comes with it. He says that as it begins to wind down, Australia will need to find other ways to maintain economic growth.

According to Reserve Bank (RBA) figures, the Australian economy is growing at an average rate of 3.1%, considerably below the 4% trend seen early this year.

As a result, the RBA says investment may have reached its peak sooner than expected – and at a lower level than expected.

Mozo says other sectors of the economy will need to step up and predicts that residential housing is set to carry the bulk of the load, but there are a few niggling concerns.

While the RBA has cut the cash rate by 175 basis points this year, JP Morgan economist Tom Kennedy says it’s not enough.

“Given the current preferences of consumers to accumulate savings and shy away from new debt, it is likely that the construction sector’s contribution to GDP will dwindle over the next few years unless residential construction activity significantly improves.”

On the upside, Australia is now experiencing on of the cheapest home loan periods in recent history – good news for borrowers.

Housing Industry Association chief economist Harley Dale says further rate cuts will be necessary, but that “sensible” policy reforms will also need to be introduced in order to reduce barriers to new housing being brought to market.